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FTTH as Municipal IaaS
- 1. @Cybera #CyberSummit14 CROWDSOURCING INNOVATION | Banff, Alberta “Open & Shifting: The Future of Networking and Municipal Connections” Lance G. Douglas | Chairman & CEO – Lightcore Group, Inc.
- 2. Meet Lance 2 CHIEF CUSTOMER CHAMPION / FOUNDER: Lightcore Group, Inc. DRIVING PASSION: making the world awesome for everyone. SINGULARITY OF CAREER FOCUS: creating mutual “Repeatable Successes”. Born and raised in Calgary; aged in Quebec for short spell; father of two; husband of the most patient wife in the world; half Dutch by marriage.
- 3. Meet Lightcore Group 3
- 4. Our Journey Together, Today… 4 FTTH Municipal IaaS 01 | Perspective on Technology’s Role in Business 02 | User Experience is the Driving Force of Business 03 | Municipal Anti-Business Model 04 | What Exactly is the Municipality’s Product? 05 | The Last-Mile = First-Mile of Opportunity 06 | Municipal IaaS Traction
- 5. 00 | What is FTTH? 5
- 6. “Business is a for-profit expression of experience.” 01 | Perspective on Technology’s Role in Business .
- 7. “Technology is a set of tools, sometimes used by business to improve, or even define, an experience.” 01 | Perspective on Technology’s Role in Business
- 8. “User Experience is the Driving Force of Business, Technology, and Lifestyles.” 02 | Perspective on Technology’s Role in Business
- 9. 02 | Perspective on Technology’s Role in Business Business Technology Better User Experience “The convergence of the two == better experience.” .
- 10. Launching a Canadian FTTH Service Provider Personal go-to-market approach was to micro-size concepts and deployment strategies of giant telcos. 03 | Municipal Anti-Business Model .
- 11. Launching a Canadian FTTH Service Provider Personal go-to-market approach was to micro-size concepts and deployment strategies of giant telcos. 03 | Municipal Anti-Business Model FAIL
- 12. 03 | Municipal Anti-Business Model Saving Grace #1 “A complex system that works is invariably found to have evolved from a simple system that worked.” - John Gall
- 13. Marketing a Canadian FTTH Service Provider Initial market evaluation and segmentation joy was based on community love. 03 | Municipal Anti-Business Model
- 14. Marketing a Canadian FTTH Service Provider Initial market evaluation and segmentation joy was based on community love. 03 | Municipal Anti-Business Model EPIC FAIL
- 15. 03 | Municipal Anti-Business Model What happened? We were expecting a 30% take-rate, based primarily on Community Love. The reality was that only 25% was of that mindset, but correctly only 30% of those would make the purchase. Community Love Reality Apathy (75%) Community: Yes, but No Thanks (17.5%)
- 16. Customer Citizen 03 | Municipal Anti-Business Model The Perception Paradox: Most people don’t volunteer to pay the gov’t for anything, and locals see O-NET as a gov’t program. Municipal Government Network Owner (non-profit) Network Operator (non-profit + RSP) Retail Service Provider (for-profit competitor)
- 17. 03 | Municipal Anti-Business Model Learned Axioms 1. “Municipalities are NOT businesses.” 2. “Citizens are not customers.”
- 18. 03 | Municipal Anti-Business Model Saving Grace #2 “Focus on the user and all else will follow.” - Google .
- 19. How, and why, does a municipality approach FTTH? 04 | What Exactly is the Municipality’s Product? .
- 20. How, and why, does a municipality approach FTTH? Citizens expect, or demand, opportunity. 04 | What Exactly is the Municipality’s Product? .
- 21. What is Municipal IaaS 21 “IaaS is the virtual delivery of computing resources in the form of hardware, networking, and storage services.” – Dummies.com “Municipal IaaS is the unified delivery of basic community resources in the form of roads, right or ways, and governance.” – Lightcore Group 05 | The Last-Mile = First-Mile of Opportunity .
- 22. Community = Opportunity 05 | The Last-Mile = First-Mile of Opportunity 22 Typical Citizen Expectation of Municipal Involvement
- 23. Cloud Analogy 23 05 | The Last-Mile = First-Mile of Opportunity
- 24. 05 | Last Mile == First Mile of Opportunity 24 Remove the Barriers • for all citizens and businesses, existing and potential • for market competition to drive up quality and reliability Better by design • build for the future while addressing today’s needs • success is repeatable and transferrable among muni’s. No lock-in • abstraction entices innovation on all fronts: • portability is important for growth and scale of value Lifestyle improvements • unified open access paves the way for community wide services, and new ideas. Better spend • muni’s need to upgrade their middle-mile infra-structure already. • the IaaS approach is risk mitigation .
- 25. What can that new telecom look like when infrastructure is a service?
- 26. The New Telecom “can”: Answer the Domain 2.0 challenge
- 27. The New Telecom “can”: Deploy over M:M NetCo’s
- 28. The New Telecom “can”: Finally, Be Agile, Nimble, and Disruptive
- 29. “Open Access” requires market competition.
- 30. “Equal Opportunity” requires equal access.
- 31. The “Digital Economy” only favours “Connected Communities.”
- 32. Being connected is beyond a critical service.
- 33. 06 | Municipal FTTH Traction CANADA OPERATIONS 33 Feasibility & Design Projects: >600K homes passed Major Market Launches: 2 to 3 in 2015 Major FTTH Announcement 1 still to come in 2014 US OPERATIONS I&R Jobs Growth: 100-200 Techs in 2015
- 34. KEY TAKEAWAY Municipal Product == “Opportunity” Municipal Citizen == “Life” Successful Municipal FTTH === “Empowering Opportunity for Better Lives”
- 35. Thank you for the opportunity to share!
- 36. Appendix A: Municipal Wireless Barrier: B.I.R.D.S. 36 Barriers | Interference | Reflections | Distance | Security 100% wireless technologies share a limited physical medium. PLUS Municipalities are density and economies of scale. EQUALS The inverse of both Metcalfe’s and Reed’s laws.
Editor's Notes
- 1
- Me… I love making customers be and feel awesome. At home, my wife is a technophobe and my 2 ½ year old is proficient with launching and picking her shows on Netflix Kids, or launching a drawing program and doogling.
- I would like to share with you today my journey of perspective, failures, realizations, and some early successes that we’re seeing in North America
- Just to level-set on the definition of the term FTTH, the boring way… the less boring way
- Furs, FB Likes, or F1 Race cars, it is about an experience, ultimately it revolves around life, and how we experience it.
- Business itself is not technology, and technology is not business. I’ve spent some time in some larger software shops, in my professional journey; and in the best of them, the technology was a part of what we did, in the worst of them, it was the “why” we did what we did.
- Ultimately…
- I hold these axioms dear because I’ve learned that their distinction is directly tied to, and key, to success in their convergence. Just as abstraction in systems of systems have proven its value in agility of the actors involved, so too does the increase in delineation between technology and business also increase its agility to deliver the best experience.
- So here I am, naive little me, preparing to apply for the role to helm the ship of O-NET, Canada’s first community-owned, community-wide FTTH carrier. At that time in my career, I was actively entrenched in the business, marketing, customer service, and holistic integration and the road-map alignment of an extensive list of telecom industry stakeholders. This should be easy to take the best of what was being developed, and leave the baggage behind. I truly believed that vendors already in the pipeline would do what they were pitching, and that we would be able pull together the integration layer using the common layers of XaaS abstraction that I had been living for nearly 15 years.
- Wow… was I ever wrong. It is one thing to work on behalf of a Fortune10 provider’s customer interfacing systems, with clear and concise business requirements that can be succinctly translated into functional and technical requirements. It is an entirely different situation to work on behalf of a municipal non-profit. I actually had one OSS/BSS vendor outright tell me something to the effect of “you’re really a waste of our time… call us back when you can affect my quota”. I had others bait and switch APIs. On a JAD session call, that I held with prior selected vendors, we also had two integral vendors simply say : “our company doesn’t actually do what you’ve been told we’re doing on your project.” The reality check was that the telco vendors were only focusing on the needs of the largest in the industry, and their pricing models, deployment concepts, and support systems were only designed for that narrow view. We’d need to look to other ways of entering the market as a FTTH quad-play provider, because our budget was already fixed, and it was no where near what needed to be to play in their sandbox. That was the first 3 months of my tenure. By this time, I had evaluated 100’s of systems, and dozens of vendors worldwide. And I began to realize that the North American market didn’t have the necessary options for a FTTH market-entrant, especially in a Canadian market, beyond the Layer 2 electronics. Even though ALU USA was awesome and had spent several weeks with me going through deployment and integration options, they too said that we’re either needing to build for 100K premises, or look for more agile and disruptive options.
- My new go-to-market approach: integration of simpler working systems. And that meant that I had to go outside of the North American market. This of course wasn’t all wins, but it was definitely more wins than losses. The primary win was that I was able to get the phone and internet up and running in beta mode, which is a regulatory, technical, and deployment experience worth a talk of its own. Where we were able to have the earliest adopters placing significant orders in month 11. Next step, hire people to actually make it run; again, a journey worth a talk of its own, too.
- So, between the time that we were able to take our first orders and planned delivery on those orders, we had an expected lag time of 30-60 days before the customer would physically be connected; simply due to civil construction timelines. So that gave us some time to complete our initial packaging. And once we had a technical team in place, and we were able to present our full suite of services to customers, we had a formal launch event. My perception, which I had borrowed from the 8 years of project conceptualization prior to my participation, was that people wanted FTTH, we were underserved market, and because it was local that it would be embraced, with dollars, by the locals, or at least 30% of them. So our intial market evaluation and segmentation joy was actually based on community love.
- Epic fail…
- Epic fail… Outside of the early adopters, the primary response was actually “Apathy”. We expected “no” as an answer upwards of 70% of the time, and I personally surveyed dozens of local businesses with a 100% buy-in to the idea. But the purchasing decision was pure apathy for the pitch of “our community will be better”. What we learned was that less than 25% of people would even consider a purchase simply based on community love, but disastrously, where we were correct was in the 30% guessimate… only 30% of the community love segment would complete a purchase. We were in trouble. And by grace, we quickly realized our error.
- There was no distinction in the minds of our citizens… yes not customers, citizens… there was no distinction between “community owned”, “for the community by the community”, and “just another government program”. That manifested its ugly head in many ways, but most succinctly in what I’ve come to realize was the “symptom” of treating citizens like customers: which is apathy. It didn’t matter that the citizens are customers of a for-profit retail service provider, their perception overruled the delineation.
- So, what did I have to learn and pivot on very quickly? Municipalities should not be part of services in a retail capacity, because citizens don’t want to be customers of government. Municipalities are dealing with supporting lives, not MRR, ARPU, and target markets. Municipalities are dealing with emotions, dealing with dreams and perceptions, of every single citizen in their boundaries, not just the ones that are favourable to their mission statement. I had to have the company overcome the perception, and immediately.
- So what did we lean on? What was working… focus on the customer. The sales and marketing manager and I quickly drafted up the new plan of attack, segmented the market into four distinct purchasing personalities, and laid out a persona-to-marketing-medium map, on how to reach each of them, what to trigger the purchase with, and where the similarities and differences would be realized for the sake of a unified underlying message. We noticed early success with one of our first strategically targeted segments, we were able to have our best door-to-door salesman (Logan), achieve upwards of 60% take-rate on the door, a near quadrupling of success overnight. And even though that was better than expected, it was validating. It proved that our changes and predictions on that specific segment were spot on, and now, the remaining work would be in letting the marketing machine run its course. When I left O-NET, strides had been made to properly align the structure of the overall program for the customer’s sake, and to separate the gov’t affiliation perception, but I think there will be many more years of getting over that entrenched perception to achieve a truly viable take-rate in that size of market. However, Customer Service was our key differentiator. And it not only separated us from our competition, but wonderfully from the perception of government run programs. Our service teams were outstanding. I often dreamt out loud in our early days that the opportunity we had that no one else did was the ability to transfer a call from tech support to in-home tech support, using the same person. There had been many times when our tech supports, our sales manager, or even the tier 1 customer experience experts had said, “do you want me to just come over and walk you through that in person?” The response was nearly always yes, and invariably positive for the customer. No, it wasn’t scalable, but it was definitely disruptive and appreciated by our customers. And that is what we needed to focus on at that time. I do hope it persists today, in Olds. Because in market of roughly 10 square miles, every once in a while, it is going to be more effective and efficient to just get up from the desk and walk over to the business or residential customer’s premises and address the issue one on one.
- So why does my talk have anything to do with how municipalities FTTH is the future? There is a successful approach to be taken. One where the citizens naturally do, or come to, expect gov’t intervention to take place in the best interests of the community.
- Citizens expect, or even demand, opportunity. The perception of opportunity is generally accepted by most, and while it may take years to solidify, once it is perceived, it has an extremely long tail that extends well beyond a single generation. Take clean water, stable power, reliable gas service , sewers, roads, parks, controls, and other such infrastructure security and stability that is expected, or even demanded by citizens. That municipal infrastructure makes generally accepted opportunity possible.
- In today’s talk, I want to expose the line of thinking that is trending at the municipal government level of our larger cities in North America – that they are, and have always been, infrastructure as a service on the base levels.
- The typical 400,000 premises municipality does indeed touch all points in the delivery of “community”, but primarily, it is on the Infrastructure side that they are most expected to supply and support.
- Municipalities are mostly infrastructure and governance at their core. The council, policies, bylaws, and systems are realizations and interpretations of that governance and infrastructure in action. The management, services, and delivery are the primary glue of the community’s stability running on that action platform.
- By the municipality taking on the core FTTH infrastructure in a base utility fashion, they protect four primary concerns: First, they protect critical access to their own Right of Ways, which are a limited resource. And secondly, they protect the ability to deliver the inevitable communications opportunity that will be demanded of them. Third, to thwart the monopolies and duopolies that they may have actually enabled to this point. Lastly, to combat urban sprawl drawbacks, municipalities need to protect their ability to incentivize green practices, such as by enticing businesses to move data back and forth to their employees, instead of commuting employees between their homes and offices.
- How? Open Access. I’ve successfully failed on numerous FTTH opportunities in Canada specifically because I told them that the “Open Access” that they were seeking would not, and could not, be sustainable in their intended market. My recommendation for medium and smaller markets, e.g. 100K dwellings or less, is always to deploy a competitive FTTH network that is designed as an Open Access network, but with a single up-front provider that helps define, vet, and deliver on municipal-policy that fosters competition. But don’t expect to deploy an open access environment in a silo and be successful in the near term. By following our advice, the municipal risk is adverted as much as possible, and they get a jump on access to the digital economy, as well as an anchor in the opportunity for new entrants from larger communities to spread out easily. The goal of smaller markets is to demonstrate the expansion opportunity for near-by innovative market-entrants that are mitigating their large up-front risks in larger markets.
- I truly believe that most people wish for equal opportunity in their respective cities. That’s mostly why I pay taxes; I was afforded opportunity, and no one is able to suggest what economical, social, or educational circles the next big thing will come from, so if we’re all truly wanting to be leaders, then we need to afford opportunity to everyone. But, to get that equality of opportunity implemented in the real world, that belief requires an equal-access approach, to remove the physical barrier to entry from the choice of which opportunity to pursue. Now, I am not a proponent of Net Neutrality, rather, I am a proponent of equality of platforms and services required to enter the market. I don’t believe that entrants shouldn’t be given additional access just so that they can compete; I believe that new entrants should have to figure out new ways to do better things with what is available… to me that is the incentive for disruptive growth that is needed to push the envelope in innovation.
- In the same way that railways only favoured towns with “?sidings” and stations.
- I believe that we’ve come to a time on our world in Canada, and in the US, that our major centres must look at the stability, longevity, and growth potential of FTTH as a minimum utility for life. If it is true that our economy is more global, more digital, more data-based, more connected, then by not accepting the necessity of every citizen having the utility to pursue that opportunity, then we are not accepting that truth… and there is no better way to see a long term decline in quality of life.
- In Canada, we’re under contract for feasibility and design projects that together represent more than 600K homes passed. We’ll see upto 3 open-access market launches in 2015 by municipalities in Canada. And we are on track for a major announcement yet in 2014 regarding a nationally-impacting open access project. In our US Operations, we’re recruiting 100-200 installation and repair techs to be working in 2-3 markets in 2015.
- If there is one thing that I would wish for everyone to take away from this talk. It would be that: Opportunity is the Municipal product, and a Citizen is so much more than a Customer. And the traction that we’re seeing in the market is by municipalities that recognize their role in merging the utility of FTTH with opportunity.